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Obama: What you didn’t know

Right now, 36 states rely on HealthCare.gov, the federal exchange, to enroll people in health coverage. At least two more states are opting in next year, with a few others likely to follow. Only two states are trying to get out.

That’s precisely the opposite of the Affordable Care Act’s original intent: 50 exchanges run by 50 states.

The federal option was supposed to be a limited and temporary fallback. But a shift to a bigger, more permanent Washington-controlled system is instead underway — without preparation, funding or even public discussion about what a national exchange covering millions of Americans means for the future of U.S. health care. It’s coming about because intransigent Republicans shunned state exchanges, and ambitious Democrats bungled them.

Republicans had warned all along that President Barack Obama’s health law would lead to greater Washington control. “This was all predictable,” said Rep. Tom Price (R-Ga.), a physician who sees growing federal control of the health system hurting patients. “Our friends on the other side didn’t listen.”

Tevi Troy, a health expert who served in the George W. Bush administration and advised Mitt Romney in 2012, says the country needs to stop and discuss the consolidation. “We’re kind of, in a way, stumbling into this situation,” he said of the increasing reliance on the federal portal.

HealthCare.gov is more than a computerized sign-up sheet. It’s a marketplace, where people get health coverage through private insurers, for care from private doctors. It’s not a single, nationalized Canadian- or British-style program. Even within the federal model, each state has its own insurance pool and state officials still regulate health plans.

The state-exchange option gave governors and legislatures more leeway to tailor the market to suit local conditions and demands. But the states encountered political and technical obstacles, leading to investigations, recriminations, disputes with contractors and hundreds of millions of wasted dollars.

“While [the administration] spent an inordinate amount of time and energy and money encouraging states to run and own their own exchanges, I think that that has kind of shifted,” said Jon Kingsdale, a prominent consultant who helped build the original Massachusetts exchange under then-Gov. Romney. “How long can you push a boulder uphill?”

HealthCare.gov was originally conceived as a just-in-case alternative that would kick in if a state could not or would not build its own health reform enrollment system. The law didn’t even set aside money to build the federal site, let alone operate it indefinitely. Even when red states shunned a role in running Obamacare and a handful of blue states also turned to Washington, the federal system was still seen as a short-term bridge to a state-based system.

Not anymore. After its fiasco of a start, HealthCare.gov is working. No one is pushing states with successful programs, like California and New York, to switch. But there are only a few of those. Most of the other states are in HealthCare.gov. And they‘re staying put rather than start their own exchange.

“Why would any governor or legislature in their right mind step forward at this point and say maybe…that’s a good idea?” wondered John McDonough, a former aide to Sen. Ted Kennedy who worked on health reform in both Washington and Massachusetts.

In theory, states can still tap into virtually unlimited funding to create exchanges. But a number of state officials say the administration has signaled that it doesn’t want to keep pouring millions into broken state systems. A spokesman for the Centers for Medicare & Medicaid Services, which oversees Obamacare exchanges, said only that states should choose whatever path “they believe best meets the needs of their consumers and insurance market.”

“CMS is committed to working closely with states to support efforts to ensure that all consumers will have access to quality, affordable, health coverage in 2015,” spokesman Aaron Albright said.

Republicans, who contributed to the growing power of HealthCare.gov by not supporting state-run exchanges, want federal investigations into why some states failed.

“While many of these states are simply moving to the federal exchange as a convenient method of alleviating the problems with their own exchanges, it is a short-sighted solution,” said Sen. Orrin Hatch, the top Republican on the Senate Finance Committee. “Nothing is more important right now than for Congress to find out what went wrong and why.”

Nevada in mid-May became the latest to scrap its system and opt into HealthCare.gov. A few days earlier, Oregon had bailed on its $250 million exchange. Massachusetts is still trying to salvage its exchange, but it’s also laying the groundwork to join HealthCare.gov.

Hawaii and Minnesota both insist they are moving ahead with their underperforming exchanges; skeptics predict they’ll have to jettison them and join the federal system sooner rather than later. And some small states with high-performing exchanges may have trouble keeping them over the long haul as federal financial support ends.

Connecticut’s exchange performed so well that Maryland wants to buy it and graft it onto its own broken one, but even the director of Connecticut’s exchange, Kevin Counihan, doubts that all the small states will be viable. “There’s going to be some consolidation there, some going to the federal exchange,” he predicted. “We don’t need 50 of these. And having this really functional federal exchange is really very, very desirable.”